Safe Bulkers, Inc.

Thank you for standing by, ladies and gentlemen, and welcome to the Safe Bulkers conference call to discuss the fourth quarter 2022 financial results. Today, we have with us from Safe Bulkers, Chairman and Chief Executive Officer, Mr. Polis Hadjianou, President Lucas Barm Paris, and Chief Financial Officer, Mr. Konstantinos Adamopoulos. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question and answer session. At which time, if you would like to ask a question, please press star 1 on your telephone keypad and wait for your name to be announced. Following this conference call, if you need any further information on the conference call or on the presentation, please contact Capital Link at 212-661-7566. I must advise you that this conference is being recorded today. Before we begin, Please note that this presentation contains forward-looking statements as defined in Section 27A of the Securities Act of 1933 as amended and Section 21E of the Securities Exchange Act of 1934 as amended. Concerning future events, the company's growth strategy and measures to implement such strategy, including expected vessel acquisitions and entering into further time charters, Words such as expects, intends, plans, believes, anticipates, hopes, estimates, and variations of such words and similar expressions are intended to identify forward-looking statements. Although the company believes that the expectations reflected in such forward-looking statements are reasonable, no assurance can be given that the expectations will prove to have been correct. These statements involve known and unknown risks and are based upon a number of assumptions and estimates which are inherently subject the significant uncertainties and contingencies, many of which are beyond the control of the company. Actual results may differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially include, but are not limited to, changes in demand for dry bulk vessels, competitive factors in the market in which the company operates, risks associated with the operations outside the United States, and other factors listed from time to time in the company's filings with the Securities and Exchange Commission. The company expressly disclaims any obligations or undertakings to release publicly any updates or revisions to any forward-looking statements contained herein to reflect any change in the company's expectations with respect thereto or any change in events, conditions, or circumstances on which any statement is based. And now I will pass the floor to Dr. Barnparis. Please go ahead, sir.

Good morning. I'm Pastor Baez, President of St. Marcus. Welcome to our Common Scholar webcast to discuss the financial results for the fourth quarter of 2022. One vision, the EBITDA, although still strong, declined in the previous quarter. In the fourth quarter of 2021, although on 9-11, they have remained relatively stable. Our balance sheet is strong, with significant touch and reward capacity. Our new collector vessel reflects the conservative nature of our capital structure. We are focused on renewing our fleet through our extensive revenue, while reducing the footprint of our existing vessels in the remaining program of environmental upgrades. We have a financial department from 0.28% per specie. and maintain our digital policy of 5 cents per share. Our liquidity and capital resources provide us with the financial flexibility we require. Let's start with the market update on slide 3. And we go to slide 4. to see the market performance. We can see here on the graphs the current status of the market. Codes have been weaker mainly as a result of the seasonal decrease in rates due to Chinese media and due to market volatile dynamics driven by the commodities price levels. On the Panama axis, the remaining commodities market is likely to provide support to the trade market throughout the second half of the year. Let me remind you here that all our goods are in period time chapters, and the average daily chapter rate is $19.8,000 per day. Moving to slide five, we present the development of CRB, the commodity index, reflecting the basic commodities future prices, for example, energy, agriculture, issues metals, and investor metals, which represent labor indicators for Citi. The index stands at five years high. At the same time, the interest rate of the state is rising. In other words, the rise in central money interest rates. Our policy makers aim to fight inflation and Russian war consequences. The inflationary monetary policy is expected to affect the global output. The general forecast of IMF upgraded the expected growth of global GDP to 2.9% for 2023, as global inflation projection for 2023 stands at 6.6%. The global growth induced commodity prices increases, the overall price pressure on food and energy prices, and the cost of delivery and supply demand balances. In this environment, the forecasted global demand growth is expected to increase only by 1% in 2022. In China, there is an opening of the economy, and expectations of a faster and unexpectedly bound supply and growth projections for 2023 to be revised up to 5.3%, which may just snowball and drive out the speedover, despite the low state concerns. India's emergence of its opponents is its reputation for a 6.1% increase in GDP for 2023. Global investment in renewable electricity capacity will continue to rise. The global economy is a short-term health crisis, and the possibility of a further pandemic will make supply-side disruptions, for example in China. On the supply side, as presented in slide 6, Despite the global instability caused by war, energy crisis, and economic and inflationary pressures, the open drive-by quality stands at about 8.6%. This level is certainly lower compared to the past decade. For this reason, we remain cautiously optimistic. Furthermore, about 25% of the medium-sized vessels is older than 15 years old. Past scrapping is expected to accelerate as a combined effect of food aging. and regulations are kicking in from the press of January 2023. What we point out here, two things. Firstly, 8% of our fleet is Japanese beef versus 40% of the global beef, which means that our fleet consists of more efficient vessels compared to the market, and can compete better in the new environment with rather lower greenhouse gas from our industry. We are one of the very few dry bag companies with such an extensive order list ahead of our peers, which shows our intention to gradually renew our fleet and compete on the basis of operational and environmental performance of our fleet over the following years. As you can see on the slide, 70% of dry bag vessels have phase 0 or phase 1, and only about 5% of dry bag fleet is expected to comply with the EXI regulation without requiring modifications or upgrades. Another point to remember here is that safe bags, there are only 44 persons, and even if a safe bag has 12 empty seats built up at 2014, an extended order could be made on that tier that have been ordered, of which seven will be delivered by the end of 2023. And at the same time, we have an interoperable development upgrade program, increase the energy efficiency, pass an increase in fuel emissions. We are now ready to complete the upgrade, including this is by the end of 2023. But one of those factors has chosen to impose And let's see our response in slide 10. In an actual dryback fleet, we have the following choices. One, to stay active until new fuels appear in the market, something that we must realize in the next decade. Watching the global and together our fleet decay with uncompetitive CO2 emissions that will be related to environmental taxes. as we did, securing low-price moving orders and the best possible emission profiles for nuclear balance, as shown in the two graphs in this slide, slide number 8. The graphs present the right greenhouse gas rating. EBDI is an existing As an example, Our empty boxes on the left and our empty climate inspector on the right graph are the best performing versions of the market, partly in relation to their dead weight tolerance. This is how we intend to compete with the environment in the future, and this is the reason why we have placed these orders at a quite early stage. Slide 9 focuses on the increased value creation as a result of our investment in scrubber technology, currently installed on 19 of our vessels. Four additional scrubbers will be involved in 2023, now in four cases, which, due to their size, are the heaviest fuel-consuming vessels, and the opponents of such investments work better. A very low-support fuel load versus a high-support fuel load price differential is translated to increase the revenues As an assumed average stock of $200 per tonne of fuel to 2023, the implied scrubber gain potential is about $24.6 million per annum for all 19 scrubbers to the grocery. Concluding our market during slide 10, during 2022 and early 2023, there has been increased industry-wide volatility driven by geopolitical disruptions in private monetary policies. The ever-changing environmental relations adherence becomes increasingly important in private trade, and as a result, demand for technological advancements and move to two-tier market in the future with differentials involving different successes. Furthermore, the combined effect of the 18-3, the low revenue and the low regulations with over-spreads with more efficient applications. that have been delivered. In this market of inclusion by the members-based competition, let me present to you guys 12 second of all characteristics which are going to pass to our leaders. On the one hand, our fundamentals, the environment, alignment of interests in all our shareholders without 40% ownership participation. Low leverage, comfortable liquidity and contract revenues and out-track record, and on the other hand, creating increased value through an extensive fleet expansion program with phase 3 new goods and upgrading of our existing fleet and installation of our new strappers, not only for our shareholders, but also investing for a greener, more competitive fleet. We would also like to focus on our fleet quality 44 vessels in our fleet have already, we have already installed a lot of local treatment systems. All eight of our kits will have service by the end of the year, and 20 vessels will be environmentally upgraded by the end of this year. We know that we have already taken delivery of three phase three units today, the MD Marshalls, the MD Climate Respect, and in January 2023, the Climate Ethics. These vessels are currently the best environmental performance globally in the dry mud market on their deadweight donors, with impressive savings in fuel consumption. We intend to compete on this basis with 12-packer ships in our fleet, with seven phase III ships by the end of 2023 and 10 by 2024. Some vessels with half of its existing fleet upgraded and by roughly the other half consisting of 12-packer ships and 10 phase III vessels by 2024 will As for us, we maintain a profitable leverage of 34%. Our debt of 423 million is comparable to our fleet's current value, which presently is 348 million, although our fleet is 10.5 years old. During 2022, our weighted average interest rate was 3.25%. 100 million euros fixed at $295 billion in an unsecured five-year bond. In addition, we had 123.3 million in cash and 292 million of secured contracted revenues as of the year end. I will conclude the now topics at the beginning of slide 14. We will look at California's downfall at 319 million, which together with a contract revenue of $292 million provides flexibility to our management in that kind of location. Let me note here that we are very much against the case On the field of bank sectors, with 2.7 years remaining duration and 19.8,000 average daily sector rate, totaling $160 million in contracted revenue for the case alone. As presented in slide 15, we have maintained a level of dividend at $0.05 per share over the last 12 years, but created a new dividend yield. The focal point in this uncertainty of the capital markets and of the economy is that we continue to buy a proportion of our free cash flows to finance our new goods that will provide us with competitive advancements in terms of fuel consumption and environmental performance, while maintaining our leverage at relatively low levels. So in addition to that, during 2022, we have repurchased 2.8 million of home shares. Now, let me summarize the investment that can rise in saltbarkers. In slide 16, we can see that saltbarkers, through its overview, is among the worst companies that will successfully navigate the environmental challenges of the energy transition and the energy-driven fields, and will tackle the global service by utilizing the incentive points of its group and the basics of its large-scale environmental upgrading program. We believe that saltbarkers are strong Fundamentals of financial flexibility to reflect market challenges and pursue opportunities. In parallel to the company's expansion, we believe the company is well positioned for the long run with an environmental-based advantage. With our strong balance sheet, annual liquidity leverage at comparable levels and comparable levels to future value, secure customers from reliable counterparties, ESG-focused fleet expansion with 11.3 million heads of competition, and environmental regulations of 2023 onwards, the company experience management team which will position against micro-challenges and to take advantage of opportunities. Now, let me back up the floor to our CEO, Kostadina Sadamopoulos, for our financial overview. Thank you, Lucas, and good morning to everyone. As a general note, during this quarter, we were operating in a naturally weakening chapter micro-involvement compared to the previous quarter, with decreased revenues due to lower highs, increased earnings from discovery-free diversions, increased operating expenses and higher interest expenses due to increasing interest rates. In slide 18, we present our quarterly net revenues and adjusted EBITDA, both at a satisfactory level. Moving on to slide 19, we present our strong chartering performance and examples of our management alignment. We achieved a daily TCE of $21,078, compared to $26,180 during the same period in 2021. The net income for the fourth quarter of 2022 is $34.9 million, compared to net income of $65.2 million during the same period in 2021. Our daily running costs stood at $5,323 versus $5,149 last year, while our daily OPEX excluded dry docking and pre-delivery expenses stood at $4,822 versus $4,666 for 2021. Our only OPEX and GNA for Q4 2022 stood at $6,760, we believe this is one of the most competitive compared to our peers. Moreover, as this includes all our dry docking expenses and pre-delivery expenses, as well as director and officers' compensation. We try to do the right thing. For example, we have zero percent commission of chartering management, and through our management, direct donations, we achieve lower average total charter commission to help parties, standing at below 4% compared to the market number of 5%. Moving to slide 20, this agenda of fleet contracted employment presenters noting that as of February 10, 2023, we have contracted revenues of approximately $229.5 million in other commissions. This is from our non-consular supporting period and charters, excluding the strategy benefit. We present the slides 21 and 22, our low breaking point of 2022, which we believe is one of the lowest in the industry, as well as the cash flow bridge in millions for the same two years respectively. The global economy is experiencing multiple challenges. Inflation, higher than seen in several decades, higher in financial conditions in most regions, Russia's invasion of Ukraine and the lingering COVID-19 pandemic all weigh heavily on the market outlook, and also our main focus is lean operations in this inflationary environment. In slide 23, we present our balance sheet analysis. We believe our balance sheet is very healthy, and assets are presented in the book value, noting that presently asset values exceed the book value. Moving on to slide 24, we have quarterly financial highlights for the fourth quarter of 2022 compared to the same period of 2021. Our adjusted earnings per share for the fourth quarter of 2022 are $356 million compared to $67.6 million for the same period in 2021. Our adjusted earnings per share for the fourth quarter of 2022 was 29 cents, calculated on a weighted average number of 118.9 million shares, compared to 39 cents during the same period in 2021, calculated on a weighted average number of 121.6 million shares. Let's conclude our presentation on slide 25 with our quarterly operating operational highlights for the fourth quarter of 2022, compared to the same period for 2021. Based on our satisfactory financial performance, the company's board of directors declared the five share dividend the common share. In regard to our size of it, we are maintaining a hefty cap position for about $116 million as of February 10, 2023. Another $132 million in available remote-recruiting facilities. as well as about $118 million in drone-boring capacity available under three existing drone facilities in relation to three existing vessels, giving a combined liquidity and capital resources of $365 million that provide us with significant high power. Furthermore, we have contracted revenue from a non-cancellably supporting period-time charge of contacts of over $2 revenue, and additional borrowing capacity in relation to seven debt-free vessels and five new bits upon their delivery. We believe that a strong liquidity and relatively low leverage will enable us to be flexible with our capital, expandably, while still rewarding our shareholders and taking advantage of possible opportunities in the near future. Thank you, and you are now ready to accept questions.

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Thank you very much, and we will be discussing again in the next quarter for our Q1 financial results for 2023. Thank you very much, and have a nice day. This concludes today's conference.

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